A global helium shortage leaves businesses deflated

Production slowdowns, increases in demand have led to shortages

Lighter than air and nonrenewable, helium is however quite rare on Earth, derived mostly from natural gas deposits. And recently it's grown scarcer.

In the Baltimore area, some florists and party-supply businesses are scrambling to find new suppliers for the helium that floats their balloons. Most are paying more for supplies, while some have raised prices or temporarily turned customers away. Other industries are feeling deflated too; besides blowing up balloons and blimps, helium is used to eliminate oxygen in welding in the aerospace industry, to cool magnets in MRI scanners and to help deep-sea divers breathe a nitrogen-free mix of air.

The supply-and-demand imbalance has become more acute recently in the United States, some experts say. The shortage results from cutbacks in global production combined with increased demand from industries such as health care and semiconductor manufacturing, experts said.

But for those who took helium for granted, news of the shortage has popped up unexpectedly.

"We've been selling balloons for 30 or 40 years, and I've never run into anything like this," said Mike Koletar, second-generation owner of his family's The Flower Cart, a Baltimore-based florist with three locations, including a shop at Johns Hopkins Hospital. "It seems like the last few months it's gotten a lot worse. I can buy balloons with air in them on sticks, but they don't float. Helium makes them float."

While medical centers don't appear to be lacking helium supplies, some experts worry about the effect of a long-term shortage.

"I've been concerned about it," said Jeff Brown, chairman of radiology at the Washington University School of Medicine in St. Louis, who has been involved in MRI scanning for 25 years and said helium has proved to be the most efficient coolant for powerful MRI magnets. "There aren't really any good alternatives for MR imaging."

The latest shortage, which started about two years ago, has left some medical facilities, researchers and even the military scrambling to replenish supplies or forced to curtail work, said Joe Peterson, assistant field manager for helium reserves for the federal Bureau of Land Management.

"There are orders out there for helium that are not able to be fulfilled as immediately as customers would like to have them," Peterson said. But "the industry hit the hardest has been party balloons and those types of applications, where helium is a nice thing to do but not an absolute necessity. I've heard about difficulties in meeting needs for helium and delays of two to three months."

Koletar, The Flower Cart owner, said his two main suppliers began informing him of shortages around Christmas.

"We had to wait for tanks to come in and get on a waiting list," he said "We just made it through Valentine's Day."

At one point, he ran out of helium for about a week and had to turn balloon orders down. He was finally able to rent a helium tank from a welding supply company.

He has had enough helium to get by, but his suppliers have been rationing supplies and his prices have tripled. A tank that used to cost about $100 now costs about $300, he said. He usually has three tanks on hand, but now he has just one, enough to last another month or two.

"You either have to pay triple the price, or they don't have it in stock," said Koletar, adding that he hasn't raised prices because summer typically is a slow season. "There's not as much of a sense of urgency. I'm being patient and trying not to overreact. If this was holiday time, I'd be more nervous."

Sook Park, owner of Lexington Florist in Lexington Market on Baltimore's west side, said she hasn't raised her balloon prices either, although her helium tank rental prices have shot up nearly 50 percent.

Times are tough enough already for florists, because the weak economy has many customers cutting back on purchases. If she increases her balloon-arrangement prices, she fears she'd never be able to compete with the many discount stores nearby that also sell balloons.

"The helium prices are very high," Park said. "There's no income from the balloons. But if I charge [more], the customers will become upset."

Businesses such as Park's likely have been the hardest hit, Peterson said, though "any area that uses helium has had some impact."

The helium shortage is linked to cutbacks in natural gas production related to the recession, Peterson said. Additionally, there have been delays in new plants coming online, both overseas and in the U.S., he said.

The shortage should be temporary, said Nick Haines, head of global helium source development for Linde North America Inc., which supplies customers with aerospace, electronics, fiber-optics and medical-imaging equipment.

"New plants are expected to start up in the U.S, Algeria and Qatar over the next year, which should ease the shortage," Haines said.

For Gia Magliano, an owner of Magical and Memorable Balloons in Towson, the doubling of helium prices has meant having to pass along 30 percent price increases for helium-filled balloon decorations for parties, such as arches that hover over tables in ballrooms. Such arrangements are priced at $50 and up, she said.

"If cost is an issue for the customer, I try to steer them to another style of decor," Magliano said, such as air-filled balloons attached to a fixture. "There's more than one way to decorate."